Exhibit
10.10


 


EXECUTION
COPY


 


NON-COMPETE AND COVENANT AGREEMENT


 


This NON-COMPETE AND COVENANT AGREEMENT (this
“Agreement”) is dated as of May 14, 2004 by and among Lazy Days’
R.V. Center, Inc., a Florida corporation (the “Company”), RV Acquisition
Inc., a Delaware corporation (“Buyer”), Donald W. Wallace  (“Wallace”), and Bruckmann, Rosser,
Sherrill & Co. II, L.P., a Delaware limited partnership (“BRS”).  Capitalized terms used but not otherwise
defined herein shall have the meaning ascribed to such terms in Section 5.


 


WHEREAS, Wallace is a seller of certain
securities of LD Holdings, Inc., a Delaware corporation (“Holdings”),
the parent of the Company, to Buyer pursuant to the Stock Purchase Agreement by
and among the Company, Buyer, Holdings, the Employee Stock Ownership Plan and
Trust for the Employees of Lazy Days and the other stockholders of Holdings,
dated as of April 27, 2004 (the “Stock Purchase Agreement”).


 


WHEREAS, pursuant to Section 8.2(t) of
the Stock Purchase Agreement, a condition of the Buyer to consummate the
transactions contemplated under the Stock Purchase Agreement is Wallace’s
agreement to be bound by this Agreement, and accordingly, the parties desire to
enter into this Agreement to fulfill such condition.


 


WHEREAS, Wallace is entering into the
Employment Agreement, dated as of the date hereof by and among the Company,
Wallace, Buyer and BRS (the “Employment Agreement”), which provides for
the employment of Wallace as the President and Chief Executive Officer of the
Company.


 


WHEREAS, a condition of the Company to enter
into the Employment Agreement, is Wallace’s agreement to be bound by this
Agreement, and accordingly, the parties desire to enter into this Agreement to
fulfill such condition.


 


WHEREAS, Buyer owns, directly or indirectly, a
majority of the issued and outstanding shares of the Company.


 


NOW, THEREFORE, in consideration of the
foregoing and the respective representations, warranties, covenants and
agreements set forth herein, the Stock Purchase Agreement and the Employment
Agreement, and other good and valuable consideration, the receipt and
sufficiency are hereby acknowledged, the parties hereto agree as follows:


 


1.                                       Public
Bonds.  As a material inducement for
BRS and Buyer to enter into the transactions contemplated by the Stock Purchase
Agreement, Wallace hereby agrees that he shall not at any time hold, directly
or indirectly, in excess of $15,200,000 (the “Notes Threshold”) of the
aggregate principal amount of 11.75% Senior Notes due 2012 of the Company (the
“Notes”); provided, that in the event that BRS acquires any of the
Notes (the aggregate principal amount of such Notes, the “BRS Notes Amount”),
Wallace shall have the right to exceed the Notes Threshold by an amount bearing
the same ratio to the BRS Notes Amount as Wallace’s ownership of common equity
securities of Buyer bears to BRS’ ownership of common equity securities of
Buyer.


 

















 


2.                                       Confidential
Information.  Wallace acknowledges
that he has obtained and will obtain information concerning the business or affairs
of the Company, any of its Subsidiaries or other affiliated entities (“Confidential
Information”).  Therefore, Wallace
agrees that he shall not, directly or indirectly, use for or disclose to any
unauthorized person or use for his own purposes any Confidential Information
unless (i) such Confidential Information becomes generally  known to and available for use by the
public other than as a result of Wallace’s acts or omissions to act;
(ii) such Confidential Information is rightfully received by Wallace from
a party who was not subject to any obligations of confidentiality; or
(iii) Wallace is required by order of a court of competent jurisdiction
(by subpoena or similar process) to disclose or discuss any Confidential
Information; provided, that in
such case, Wallace shall promptly inform the Company of such order, shall
cooperate with any reasonable effort by the Company to obtain a protective
order or to otherwise restrict such disclosure, and shall only disclose
Confidential Information to the minimum extent necessary to comply with any
such court order.  If in the absence of
a protective order or the receipt of a waiver hereunder, Wallace, on the advice
of counsel, is compelled to disclose any Confidential Information to any
tribunal or else stand liable for contempt, Wallace shall promptly inform the
Company of such obligation, shall cooperate with any reasonable effort by the
Company to obtain a protective order or to otherwise restrict such disclosure,
and shall only disclose Confidential Information to the minimum extent
necessary to comply with any such obligation. 
Wallace shall deliver to the Company at the termination of the
Employment Period, or at any other time the Company may request, all memoranda,
notes, plans, records, reports, computer tapes and software and other documents
and data (and copies thereof) relating to the Confidential Information, Work
Product and the business of the Company, any of its Subsidiaries or other
affiliated entities which he may then possess or have under his control.


 


3.                                       Inventions
and Patents.  Wallace agrees that
all inventions, innovations, improvements, developments, methods, designs,
analyses, drawings, reports, and all similar or related information which
relates to the Company’s or any of its Subsidiaries’ actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Wallace while employed by the
Company or any of its Subsidiaries (“Work Product”) belong to the
Company or such Subsidiary.  Wallace
will promptly disclose such Work Product to the Board and perform all actions
reasonably requested by the Board (whether during or after the Employment
Period) to establish and confirm such ownership (including, without limitation,
assignments, consents, powers of attorney and other instruments).


 


4.                                       Noncompete,
Nonsolicitation.


 


(a)                                  Wallace
acknowledges that in the course of his employment with the Company and its
Subsidiaries he has become familiar, and he will become familiar, with the
Company’s and its Subsidiaries’ trade secrets and with other Confidential
Information and that his services have been and will be of special, unique and
extraordinary value to the Company and its Subsidiaries.  Therefore, Wallace agrees that during the
period beginning on the date hereof and ending on the later of (i) the
fifth anniversary of the date hereof, and (ii) the third anniversary of
the termination of Wallace’s employment with the Company for any reason, (the


 


2

















 


“Noncompete Period”), he shall not
shall not directly or indirectly own, manage, control, participate in, consult
with, render services for, or in any manner engage in any business (including
by himself or through any other entity) competing with the businesses of the
Company or its Subsidiaries in The United States of America, Canada or The
United States of Mexico (the “Territory”) as such businesses exist or
are in process on the date of the termination of Wallace’s employment with the
Company.  Nothing herein shall prohibit
Wallace from being a passive owner of not more than 5% of the outstanding stock
of a corporation which is publicly traded, so long as Wallace has no active
participation in the business of such corporation.


 


(b)                                 During
the Noncompete Period, Wallace shall not directly or indirectly through another
entity (i) influence or attempt to influence any of the customers of the
Company or its Subsidiaries to divert their business or patronage from the
Company or its Subsidiaries to any other person or company engaged in a similar
business, (ii) disclose to any person or entity the names, addresses, or
requirements of, or other confidential information or trade secrets relating to
any customers of the Company or its Subsidiaries, the prices charged to such
customers or the practices used in servicing such customers (other than in the
course of Wallace’s employment and consistent with his duties as the President
and Chief Executive Officer), (iii) make any statement or do any act
intended to cause existing or potential customers of the Company or its
Subsidiaries to make use of the services or purchase the products of any
competitive business, (iv) hire or attempt to hire any person who was
employed by the Company or its Subsidiaries for any type of employment one
hundred eighty days prior to the date of Termination, (v) induce or
attempt to induce any employee of the Company or its Subsidiaries to leave his
or her employ or in any way interfere with the relationship between the Company
or its Subsidiaries and any of their employees, or (vi) in any way
interfere with relationship between the Company or any of its Subsidiaries with
any of their suppliers.


 


(c)                                  The
parties hereto acknowledge and agree that the Company will suffer irreparable
harm from a breach by Wallace of any of the covenants or agreements contained
in Sections 2, 3 and 4.  Wallace further
acknowledges that the restrictive covenants set forth in Sections 2,
3 and 4 are of a special, unique, unusual and extraordinary
character, the loss of which cannot be adequately compensated by damages.  Wallace agrees that the periods of
restriction and geographic area of restriction imposed by the provisions of
this Section 4 are fair and reasonable and are reasonably required
for the protection of the Company in whose favor such restrictions
operate.  The Company acknowledges that,
but for Wallace’s agreements to be bound the restrictive covenants set forth in
Sections 2, 3 and 4, neither the Company, Buyer nor
BRS would not have entered into this Agreement, the Stock Purchase Agreement or
the Employment Agreement.  The
restrictive covenants set forth in this Agreement supersede any restrictive
covenants with respect to the subject matters addressed by the restrictive
covenants set forth in Sections 2, 3 and 4 set forth
in any current agreement between Wallace and the Company.  Wallace agrees that the Company has a


 


3

















 


legitimate business interest to protect
justifying the restrictive covenants set forth in Sections 2, 3
and 4.  Such legitimate business
interests include:  (i) trade
secrets, as defined in Florida Statute 688.002(4); (ii) valuable
confidential business information that does not otherwise qualify as a trade
secret; (iii) substantial relationships with prospective or existing
customers; and (iv) customer goodwill. 
In the event of an alleged or threatened breach by Wallace of any of the
provisions of Sections 2, 3 and 4, the Company or its
successor or assign may, in addition to all other rights and remedies existing
in its or their favor, apply to any court of competent jurisdiction for
specific performance and/or injunctive or other equitable relief (without
posting a bond or other security) in order to enforce or prevent any violations
of the provisions hereof (including, without limitation, the extension of the
Noncompete Period by a period equal to the duration of the violation of Sections 4).  In the event of an alleged breach or
violation by Wallace of any of the provisions of Sections 4, the
Noncompete Period shall be tolled until such alleged breach or violation is
resolved.


 


(d)                                 Wallace
and the Company intends that the covenants of Section 4(a) shall be
deemed to be a series of separate covenants, one for each month of the
Noncompete Period.  Additionally,
Wallace and the Company intend that the covenants of Section 4(a)
shall be deemed to be a series of separate covenants, are for each county or
province of each and every state, territory or jurisdiction within the
Territory and one for each month of the Noncompete Period.  If, at the time enforcement is sought of any
of the provisions of Sections 4, a court of competent jurisdiction
holds that the restrictions stated herein are unreasonable under the
circumstances then existing, the parties hereto agree  that the maximum  period,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area.


 


(e)                                  Except
for the Company’s compliance with Section 4(g), the existence of
any claims or cause of action of Wallace against the Company, whether
predicated upon this Agreement or otherwise, shall not constitute a defense to
the enforcement by the Company of the restrictive covenants set forth in Sections 2,
3 and 4.  The refusal or
failure of the Company to enforce any of the restrictive covenants set forth in
Sections 2, 3 and 4 against Wallace, for any reason,
shall not constitute an act of precedent or a defense to the enforcement by the
Company of the restrictive covenants set forth herein, nor shall it give rise
to any claim or cause of action by Wallace against the Company.  If any action should have to be brought by
the Company against Wallace to enforce the provisions of Sections 2,
3 and 4, Wallace recognizes, acknowledges and agrees that the
Company is entitled to all of the civil remedies provided Sections 542.335,
688.003, and 812.035, Florida Statutes, including without limitation
(i) preliminary and permanent injunctive relief restraining Wallace from
unauthorized disclosure or use of any trade secret or confidential information,
in whole or in part, or otherwise violating any of the restrictive covenants
set forth in Sections 2, 3 and 4; (ii) actual
damages; (iii) attorney’s fees in trial and appellate courts; and
(iv) costs and expenses of investigation and litigation, including expert
fees and


 


4

















 


other costs and expenses.  Nothing in this Agreement shall be construed
as prohibiting the Company from pursuing any other legal or equity remedies
available for breach or threatened breach to the provisions of Sections 2,
3 and 4, which may otherwise be available.  Wallace expressly acknowledges that the
restrictive covenants set forth in Sections 2, 3 and 4
apply to any successor or permitted assign of the Company, Buyer and BRS as
direct third-party beneficiary and that such restrictive covenants are
expressly intended for the benefit of such successor and assign.


 


(f)                                    Except
for the Company’s compliance with Section 4(g), each of Wallace and
the Company agrees that the covenants made in Section 4(a) and 4(b)
shall be construed as an agreement independent of any other provision of this
Agreement and shall survive any order of a court of competent jurisdiction
terminating any other provision of this Agreement.


 


(g)                                 The
Company shall pay Wallace, in consideration of the covenants made by Wallace in
Sections 2, 3 and 4, and in addition to any other
consideration under the Stock Purchase Agreement and his salary under the
Employment Agreement, as independent and special consideration, $2,000,000 per
annum (payable in accordance with the Company’s payroll practices, but at least
monthly, and in accordance with the terms and conditions of the Employment
Agreement) for so long as Wallace is employed as the President and Chief
Executive Officer by the Company or serves as a member of the board of
directors of Buyer, Holdings or the Company and, if Wallace’s employment is
terminated by the Company without Cause or by Wallace within 90 days of a
Good Reason Event, for a period of twelve months thereafter, if such employment
is terminated prior to the eighteen month anniversary of the date hereof, or
six months thereafter, if such employment is so terminated on or after the
eighteen month anniversary of the date hereof; provided,
that if following such termination Wallace continues to serve as a member of
the board of directors of Buyer, Holdings or the Company, Wallace shall receive
such payment for the longer of (i) the twelve month or six month period,
as applicable, and (ii) the period during which he serves as a member of
the board of directors of Buyer, Holdings or the Company.  Wallace agrees that he shall be entitled to
the payments following the termination of his employment provided for in this Section 4(g)
if and only if he has not breached, as of the date of termination of the
Employment Period, (A) the provisions of Sections 2, 3
and 4(b)(ii) in any material respect, and (B) Section 4
(other than Section 4(b)(ii)), and does not breach such provisions
at any time during the period for which such payments are to be made; provided, that with respect to any breach
of Section 3, Wallace shall be given the opportunity to cure such
breach within 30 days; provided further,
that the Company’s obligation to make the payments following the termination of
his employment provided for in Section 4(g) will terminate upon
Wallace breaching during such severance period (A) the provisions of Sections 2,
3 and 4(b)(ii) in any material respect, or (B) Section 4
(other than Section 4(b)(ii)); provided,
that with respect to any breach of Section 3, Wallace shall be
given the opportunity to cure such breach within 30 days.


 


5

















 


(h)                                 Notwithstanding
anything to the contrary set forth in this Agreement, in the event the Company
(A) (i) defaults in the performance of its obligations under that
certain Ground Lease dated July 15, 1999 between the Company and I-4 Land
Holding Limited Company (the “Landlord”), as amended as of the date
hereof (the “Ground Lease”), (ii) the Landlord takes possession of
the “Land” as defined in the Ground Lease, and (iii) the Company ceases
operations, then the provisions of Sections 2, 3 and 4
shall be null and void and Wallace shall not be restricted in any manner
whatsoever with respect to such sections, or (B) (i) defaults in the
performance of its obligations under the Ground Lease, (ii) the Landlord
takes possession of the Land, and (iii) continues to operate at another location,
then the Landlord may lease the Land to any Person, including a competitor to
the Company.


 


5.                                       Definitions:  As used herein, the following terms shall
have the following meanings:


 


(a)                                  “Board”
means the board of directors of the Company.


 


(b)                                 “Cause”
has the meaning ascribed to such term in the Employment Agreement.


 


(c)                                  “Employment
Period” has the meaning ascribed to such term in the Employment Agreement.


 


(d)                                 “Good
Reason Event”  has the meaning
ascribed to such term in the Employment Agreement.


 


(e)                                  “Person”
means an individual, a partnership, a corporation, an association, a joint
stock company, a limited liability company, a trust, a joint venture, an
unincorporated organization or a governmental entity or any department, agency
or political subdivision thereof.


 


(f)                                    “Subsidiary”
means, with respect to any Person, any corporation, partnership, association or
other business entity of which (i) if a corporation, a majority of the total
voting power of shares of stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof, or (ii) if a partnership, limited liability company, association or
other business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination
thereof.  For purposes hereof, a Person
or Persons shall be deemed to have a majority ownership interest in a
partnership, limited liability company, association or other business entity if
such Person or Persons shall be allocated a majority of partnership, limited
liability company, association or other business entity gains or losses or
shall be or control the managing director or general partner of such
partnership, limited liability company, association or other business entity.


 


6

















 


(g)                                 “Termination”
has the meaning ascribed to such term in the Employment Agreement.


 


6.                                       Notices.  All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given when delivered
personally, mailed by certified or registered mail, return receipt requested
and postage prepaid, or sent via a nationally recognized overnight courier, or
sent via facsimile to the recipient (followed by telephone confirmation to the
receiving party).  Such notices, demands
and other communications will be sent to the address indicated below:


 


To Wallace:


 


c/o Lazy Days’ R.V.
Center, Inc.

6130 Lazy Days Boulevard

Seffner, Florida 33584

Facsimile:  (813) 246-5240


 


With a copy, which shall
not constitute notice to Wallace, to:


 


Holland & Knight LLP

701 Brickell Avenue, Suite 3000

Miami, FL 33131

Attention:  Ronald Albert, Jr., Esq.

Facsimile:  (305) 789-7799


 


To the Company:


 


Lazy Days’ R.V. Center,
Inc.

6130 Lazy Days Boulevard

Seffner, Florida 33584

Attention:  General Counsel


Facsimile:  (813) 246-5240


 


With a copy, which shall
not constitute notice to the Company, to:


 


Kirkland & Ellis
LLP

Citigroup Center

153 East 53rd Street

New York, NY 10022-4675

Attention:  Kimberly P. Taylor, Esq.

Facsimile:  (212) 446-4900


 


To BRS and Buyer:


 


c/o Bruckmann, Rosser,
Sherrill & Co., Inc.

126 East 56th Street

New York, NY 10022

Facsimile: (212) 521-3799

Attention:  Thomas J. Baldwin


 


7

















 


With a copy, which shall
not constitute notice to either BRS or Buyer, to:


 


Kirkland & Ellis
LLP

Citigroup Center

153 East 53rd Street

New York, NY 10022-4675

Attention:  Kimberly P. Taylor, Esq.

Facsimile:  (212) 446-4900


 


or such other address or to the attention of
such other person as the recipient party shall have specified by prior written
notice to the sending party.


 


7.                                       Miscellaneous.


 


(a)                                  Wallace’s Employment by the Company.  Nothing contained in this Agreement shall be
deemed to obligate the Company, Holdings, Buyer or BRS or any Subsidiary of the
Company to employ Wallace in any capacity whatsoever or to prohibit or restrict
the Company (or any of its Subsidiaries) from terminating the employment of
Wallace at any time or for any reason whatsoever, with or without Cause.


 


(b)                                 Severability.  Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.


 


(c)                                  Complete Agreement.  This Agreement embodies the complete agreement
and understanding among the parties and supersedes and preempts any and all
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any
way.


 


(d)                                 Counterparts.  This Agreement may be executed in separate counterparts, each of
which is deemed to be an original and all of which taken together constitute
one and the same agreement.


 


(e)                                  Successors and Assigns.  Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by Wallace,
the Company, Buyer, BRS and their respective successors and assigns; provided, that the rights and obligations
of the Wallace under this Agreement shall not be assignable; provided further, that the rights and
obligations of the Company under this Agreement shall not be assignable except
to a purchaser of all or substantially all of the assets of the Company (provided, that such purchaser explicitly
assumes all of the Company’s obligations under this Agreement); provided further, that the rights and
obligations of Buyer and BRS under this Agreement shall not be


 


8

















 


assignable except (i) to affiliates of
Buyer or BRS, or (ii) to any purchaser, directly or indirectly, of
(A) more than 50% of the voting securities of Buyer or the Company
(whether by merger, consolidation, sale or transfer of any or all of Buyer’s or
the Company’s outstanding capital stock), or (B) all or substantially all
of the assets of the Company.


 


(f)                                    Governing Law.  The corporate law of the State of Delaware will govern all
questions concerning the relative rights of Buyer and its stockholders.  All other questions concerning the construction,
validity and interpretation of this Agreement will be governed by and construed
in accordance with the domestic laws of the State of Florida, without giving
effect to any choice of law or conflict of law provision or rule (whether of
the State of Florida or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Florida.


 


(g)                                 Remedies. 
Each of the parties to this Agreement will be entitled to enforce its
rights under this Agreement specifically, to recover damages and costs (including
reasonable attorneys’ fees) caused by any breach of any provision of this
Agreement and to exercise all other rights existing in its favor.  The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the provisions
of this Agreement and that any party may in its sole discretion apply to any
court of law or equity of competent jurisdiction (without posting any bond or
deposit) for specific performance and/or other injunctive relief in order to
enforce or prevent any violations of the provisions of this Agreement.


 


(h)                                 Amendment and Waiver.  The provisions of this Agreement may be
amended and waived only with the prior written consent of all of the parties
hereto.


 


*  
*   *   *


 


9

















 


IN WITNESS WHEREOF, the parties hereto have
executed this Non-Compete and Covenant Agreement as of the date first written
above.


 


 


	
   

  	
  /s/ Donald W. Wallace

  	
   

  
	
   

  	
  Donald
  W. Wallace

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LAZY
  DAYS’ RV CENTER, INC. a Florida corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles L. Thibault

  	
   

  
	
   

  	
   

  	
  Name: Charles L.
  Thibault

  	
   

  
	
   

  	
   

  	
  Title: Chief Financial
  Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RV
  ACQUISITION INC. a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  John Horton

  	
   

  
	
   

  	
   

  	
  Name: John Horton

  	
   

  
	
   

  	
   

  	
  Title: Chief Operating
  Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRUCKMANN,
  ROSSER, SHERRILL & CO. II, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BRSE, L.L.C.

  
	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tom Baldwin

  	
   

  
	
   

  	
   

  	
  Name: Tom Baldwin

  	
   

  
	
   

  	
   

  	
  Title: Managing
  Director

  	
   

  



 


 


[Signature
Page to the Non-Compete and Covenant Agreement]